The U.S. Court of Appeals for the Second Circuit recently held that a debtor in bankruptcy can pursue claims under the federal Fair Debt Collection Practices Act in district court for trying to collect a discharged debt, reversing a judgment dismissing the FDCPA claims and requiring the plaintiff seek relief in bankruptcy court. A copy of the opinion in Garfield v. Ocwen Loan Servicing, LLC is available at: Link to Opinion. The debtor defaulted on her mortgage loan and filed for Chapter 13 bankruptcy, agreeing in her reorganization plan to pay the arrearage on her mortgage in monthly payments. The debtor received…
The U.S. Court of Appeals for the Sixth Circuit recently rejected a borrower’s “robo-signing” challenge to his foreclosure. In so ruling, the Court also held that a Michigan state court’s issuance of a preliminary injunction against a mortgagee in a foreclosure action did not bar subsequent removal and entry of summary judgment in favor of the mortgagee by a federal district court. A copy of the opinion in Burniac v. Wells Fargo Bank, NA is available at: Link to Opinion. The borrower obtained a mortgage loan, and the mortgage was later assigned. The new mortgagee continued to send the borrower his monthly…
The Supreme Court of the United States recently held that a class action defendant cannot “pick off” the named plaintiff and thereby render the case moot by simply offering full relief by way of settlement offer or offer of judgment under Federal Rule of Civil Procedure 68. However, as the majority acknowledges, the Court also left open the question of what happens when a defendant actually tenders full relief to the named plaintiff, thus potentially leaving class action defendants an alternative weapon to cost-effectively defeat class claims. A copy of the opinion in Campbell-Ewald Co. v. Gomez is available at: Link…
The U.S. District Court for the Northern District of Illinois recently held that the automatic stay in bankruptcy does not, by itself, operate to revoke prior express consent under the federal Telephone Consumer Protection Act (TCPA). However, the Court also held that, in this particular case, the debtor had sufficiently alleged that she had not given consent to the creditor or debt collector defendants in the first place, and thus allowed the debtor’s individual and putative class TCPA claims to go forward. In addition, the Court rejected the debtor’s attempt to bring TCPA class claims for injunctive and declaratory relief,…
The Third District Court of Appeal, State of Florida, recently reversed a trial court’s dismissal of foreclosure proceedings due to a ruling that a lost note was not properly re-established, holding that the trial court should have entered judgment for the plaintiff mortgagee because the plaintiff mortgagee met the statutory requirements for re-establishing the lost note, and because the trial court admitted business records without objection into evidence showing the note was in default. A copy of the opinion in Nationstar Mortgage, LLC v. Marquez, et al. is available at: Link to Opinion. The borrower signed a note and mortgage in…
The U.S. Court of Appeals for the Fifth Circuit recently held that section 506(c) of the Bankruptcy Code, 11 U.S.C. § 506(c), permits a trustee to recover from a secured creditor the expenses the trustee incurred while maintaining a property during bankruptcy. A copy of the opinion in In re Domistyle, Inc. is available at: Link to Opinion. The debtor in this case was placed into receivership in April 2013. The receiver initiated Chapter 11 proceedings on the belief that the debtor had enough equity to reorganize. One of the debtor’s most valuable assets was an industrial building situated on 17 acres…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed a final judgment in favor of a borrower based on an alleged oral modification of the mortgage and the doctrine of promissory estoppel, holding that because the mortgage fell within the statute of frauds, it could not be orally modified, and that the trial court misapplied the doctrine of promissory estoppel. A copy of the opinion in Ocwen Loan Servicing, LLC v. Jean Marie Delvar a/k/a Jean Delvar, et al. is available at: Link to Opinion. A mortgagee sued to foreclose in April 2008. The borrower’s answer raised…
The U.S. District Court for the Southern District of New York recently dismissed a putative class action alleging violations of the federal Telephone Consumer Protection Act (TCPA) against a marketing company that conducted a mass text message advertising campaign on behalf of a national retail clothing store. In so ruling, the Court held that: (1) the plaintiffs failed to adequately plead that the marketing company is directly liable under the TCPA as the party who “made” the subject text messages; and (2) the plaintiffs failed to adequately plead any agency relationship between the marketing company and the company that actually…
The U.S. Court of Appeals for the Sixth Circuit recently confirmed that a servicer and loan owner who did not bring a debt collection or foreclosure action as a counterclaim to a federal Fair Debt Collection Practices Act (FDCPA) lawsuit did not waive their ability to collect on the debt in the future. A copy of the opinion in Bauman v. Bank of America, NA is available at: Link to Opinion. In August 2004, the borrowers obtained a loan and executed a note to purchase property. The note was secured by a mortgage on the property. Later that year, the loan was…
The U.S. Court of Appeals for the Ninth Circuit recently held that a 2009 amendment to the federal Truth in Lending Act (TILA), codified at 15 U.S.C. § 1641(g), which contains disclosure requirements for the sale or transfer of a mortgage loan, does not apply retroactively. A copy of the opinion in Mohammad Ali Talaie et al. v. Wells Fargo Bank NA et al. is available at: Link to Opinion. The plaintiff homeowners brought a putative class action against two banks alleging violations of various federal and state laws and alleging claims arising out of the modification of the deed of trust…
The U.S. Bankruptcy Court for the Middle District of Florida recently overruled a debtor’s objection to a mortgagee’s secured claim and denied the debtor’s motion to determine secured status, holding that the issues should have been brought by adversary proceeding, and in any event neither Florida’s statute of limitations nor its statute of repose barred enforcement of the note and mortgage. A copy of the opinion in In re Anthony is available at: Link to Opinion. A mortgagee filed a mortgage foreclosure action in Florida state court in 2009. The complaint contained a paragraph accelerating the note. The mortgagee also…
The Federal Trade Commission has released a report examining the benefits, potential risks, and legality of the use of big data in business. Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues focuses on how big data is used after it is collected and how that information could result in discrimination against consumers. The primary goal of the report is to provide businesses with important information on the relevant laws to big data analytics, as well as guidelines on how to use big data effectively while remaining compliant and non-discriminatory, according to the FTC. “Big data’s role is…